US President Donald Trump promised an economic boom, and he says it has already begun, touting a bubbly stock market and commitments from high-profile companies to speed up hiring. But beneath the bravado, ominous signs reveal a still-sluggish economy that is unlikely to take off any time soon.

“Stock Market at all time high, unemployment at lowest level in years (wages will start going up) and our base has never been stronger!” Trump tweeted Sunday night, following Monday morning with: “At some point the Fake News will be forced to discuss our great jobs numbers, strong economy, success with ISIS, the border & so much else!”

Trump is correct about the stock market and declining unemployment, which currently sits at 4.3 per cent. Business and consumer confidence is high, though both have cooled a bit. Companies are announcing plans to expand and add jobs, such as Samsung’s announcement Wednesday that it would create almost 1,000 new jobs over the next three years with the construction of a new facility in South Carolina.

But other trends are more worrisome. US factory output fell in May, the second decline in three months, due in part to a drop in the production of automobiles. New orders for durable goods, such as furniture, electronics and appliances, were down 1.1pc, more than expected. And housing starts — the construction of new homes — fell to an eight-month low.

Job and wage growth remain steady and underwhelming. The 362,000 jobs added between March and May is the fewest during a three-month period since mid-2012. And instead of rampant hiring, a number of companies have announced layoffs in recent weeks, including Ford, General Motors, Kellogg’s, and Sears.

And overall, the economy Trump is overseeing as president looks a lot like the one he lambasted as a candidate: a slow, largely steady grind that has chipped away at the damage done by the 2008-2009 recession but that has been insufficient to usher in a new era of prosperity.

Caught between Trump’s promises and an unyielding reality, White House officials are doing a juggling act. They highlight positive trends in the economy while also jawboning Congress into enacting key parts of their agenda. Top advisers are pushing for an overhaul of the tax code that would slash rates, something the White House says will spur more hiring and investment.

They are also trying to design a large-scale infrastructure plan that would rebuild roads, bridges, and airports, among other things. But many of those plans have been bogged down by the extended squabbling over how to handle the health care repeal effort. He has had more success slashing regulations, but that hasn’t had a material impact on hiring and growth, several economists said.

Multiple economists have said the White House’s efforts to grow the economy through regulatory changes and coaxing alone have had little impact so far.

“No change,” said Mark Zandi, chief economist at Moody’s Analytics. “Nothing. Not a change.”

White House officials said for the economy to grow as fast as Trump has promised, Congress will have to move quickly to enact his agenda, including the tax cuts and the infrastructure spending. He is also pushing for new bilateral trade agreements and a widespread reduction in regulations.

Senior administration officials said they are aware of the recent spate of mixed economic data. They are keeping a close eye on whether monthly blips become longer-term strains, several said, though they are still optimistic things are improving.

White House National Economic Council Director Gary Cohn, in a statement to The Washington Post, outlined several positive trends in the economy, including the lower unemployment rate, and said things are improving.

“These are all good trends, but we know there is more work to do, including improving wage growth for hard-working Americans,” he said. “We believe this Administration can help drive a better job environment in this country, and that’s why we’re working every day to address burdensome regulations, reform the tax code and restore our nation’s infrastructure.”

Bloomberg-The Washington Post Service

Published in Dawn, July 4th, 2017